Zenon Quispe - Academia.edu (original) (raw)
Papers by Zenon Quispe
Social Science Research Network, Dec 1, 2017
This article reviews macroprudential measures implemented in Peru to counter the boom-bust patter... more This article reviews macroprudential measures implemented in Peru to counter the boom-bust pattern of the credit cycle and mitigate the risks associated with dollarisation, the main vulnerability of the Peruvian financial system.
Analizan el rol de la tasa de referencia del BCRP para preservar la estabilidad de precios y el u... more Analizan el rol de la tasa de referencia del BCRP para preservar la estabilidad de precios y el uso del encaje a fin de reducir los riesgos asociados a la dolarizacion financiera.
Despite the average inflation levels of 2.8 percent between 2002 and 2015, within the range of th... more Despite the average inflation levels of 2.8 percent between 2002 and 2015, within the range of the price stability goal, partial dollarization remains as the main vulnerability of the Peruvian economy. Although financial dollarization has already been importantly reduced, in the case of lending, from 82 percent at the end of 1990’s to 29 percent in June 2016; the dollarization of transactions persists at high levels such as 58 percent imposing important challenges to monetary policy, principally in events of higher volatility of the exchange rate which passes-through to domestic inflation. In this scenario, measuring the real dollarization at the sectorial level and at the level of the structure of costs of non-financial firms becomes crucial to understand it and to contribute to the design of the monetary policy in the presence of dollarization. ∗The authors would like to thank to the participants of the XXXIV Central Reserve Bank of Peru Annual Research Conference for their useful...
Aunque la dolarizacion financiera se ha reducido considerablemente (en el caso de los creditos, d... more Aunque la dolarizacion financiera se ha reducido considerablemente (en el caso de los creditos, de mas de 80 en 1990 a menos de 30 en 2017), la dolarizacion de las transacciones persiste en niveles altos (alrededor de 60 por ciento). Ello impone desafios importantes a la politica monetaria, principalmente en escenarios de mayor volatilidad del tipo de cambio, que afectan a la inflacion domestica a traves del traspaso hacia precios. Este documento presenta una medicion de la dolarizacion real a nivel sectorial y al nivel de la estructura de costos de las empresas no financieras, lo que resulta crucial para comprender mejor este fenomeno y contribuir al diseno de la politica monetaria en el Peru.
During the early 1990s, many emerging market economies in Asia and Latin America experienced mass... more During the early 1990s, many emerging market economies in Asia and Latin America experienced massive capital inflows, favoured by structural reforms and improvements in macroeconomic management. Although the higher degree of financial integration brought many benefits, the capital inflows resulted in overheating and increased vulnerability to financial crises, which led in some cases to sudden reversals of capital flows.
Este articulo analiza uno de los elementos fundamentales de las reformas de las autoridades monet... more Este articulo analiza uno de los elementos fundamentales de las reformas de las autoridades monetarias, la independencia del banco central, concepto trascendental en el objetivo de mantener la estabilidad de precios.
Macroeconomics: Monetary & Fiscal Policies eJournal, 2017
This article reviews macroprudential measures implemented in Peru to counter the boom-bust patter... more This article reviews macroprudential measures implemented in Peru to counter the boom-bust pattern of the credit cycle and mitigate the risks associated with dollarisation, the main vulnerability of the Peruvian financial system.
Banking & Insurance eJournal, 2015
Bank lending remains the most important funding source for Peru’s non-bank private sector. Howeve... more Bank lending remains the most important funding source for Peru’s non-bank private sector. However, the corporate bond market is slowly emerging as an additional source of funds for domestic firms. As in other emerging market economies, Peruvian domestic non-financial corporations have been issuing bonds in the international capital markets,4 partly replacing domestic market bond issuances. Offshore issuance is cheaper, owing to quantitative easing in the developed world, and can also be attractive in terms of market efficiency, liquidity and economies of scale, in contrast to the less liquid local market. Although certain non-bank financial entities such as domestic pension funds are in a position to encourage the development of the domestic capital market, these entities are mainly oriented to the international markets.Full publication: What Do New Forms of Finance Mean for EM Central Banks?
El traspaso del tipo de cambio hacia precios domesticos en escenarios de dolarizacion impone mayo... more El traspaso del tipo de cambio hacia precios domesticos en escenarios de dolarizacion impone mayores retos a la politica monetaria. Mas aun, estos retos aumentan cuando las transacciones reales estan dolarizadas y contaminan la formacion de expectativas de inflacion al introducir asimetrias y no linealidades en la relacion entre el tipo de cambio y la inflacion durante periodos de alta depreciacion cambiaria en contraste a episodios de depreciacion moderada y periodos de apreciacion.
ERN: Monetary Policy Objectives; Policy Designs; Policy Coordination (Topic), 2016
Dollarisation intensifies the challenges posed to monetary policy by the pass-through of the exch... more Dollarisation intensifies the challenges posed to monetary policy by the pass-through of the exchange rate to domestic prices. These challenges become even greater when real transactions are dollarised, contaminating the formation of inflation expectations. This introduces non-linearities and asymmetries into the implications of the exchange rate for inflation during larger currency depreciations, in contrast to the case of smaller depreciations and appreciations. Full publication: Inflation Mechanisms, Expectations and Monetary Policy
Implementing monetary policy requires a good understanding and modelling of the monetary transmis... more Implementing monetary policy requires a good understanding and modelling of the monetary transmission mechanism. In the particular case of developing economies like Peru, this transmission mechanism would need to consider the degree of financial market development, price rigidities, the partial dollarisation of the economy, some possible non-linearity and the operating procedures of the central bank. It is also vital to be able to identify if shocks are transitory or permanent, nominal or real. These characteristics, together with the central banks aversion/tendency to frequent policy changes and the structure of its loss function, will exert some influence on the monetary policymakers reaction function.
La expansion monetaria sin precedentes implementada por los bancos centrales de paises desarrolla... more La expansion monetaria sin precedentes implementada por los bancos centrales de paises desarrollados en anos recientes genero un nivel extraordinario de flujos de capitales hacia los paises emergentes, y mantuvo altos los precios de commodities. En este documento, se describe que la respuesta de politica implementada por el Peru para enfrentar estos flujos se baso en las intervenciones cambiarias esterilizadas en el mercado cambiario y el uso de requerimientos de encaje sobre los pasivos externos de los bancos locales. Ambos instrumentos contribuyeron de manera significativa a reducir excesos de volatilidad del tipo de cambio, incrementar las reservas internacionales y asegurar el flujo normal del credito.
Comparative Political Economy: Monetary Policy eJournal, 2011
Economic and financial integration has reshaped the monetary policy frameworks and transmission c... more Economic and financial integration has reshaped the monetary policy frameworks and transmission channels in the emerging market economies (EMEs) over the past two decades. Economic and financial linkages have become stronger, resulting in greater synchronization of business cycles across advanced and emerging market economies. This has led to the faster transmission of shocks, especially through financial channels. Against this background, the 16th annual meeting of Deputy Governors from the major emerging market economies, held at the BIS in Basel in February 2011, addressed the question of how external factors had affected monetary policy in EMEs over the past few years. The present volume brings together papers prepared for that meeting. The discussion was organized around four broad topics: international banks, new liquidity rules and monetary policy in EMEs; exchange rates and monetary policy frameworks in EMEs; the implications of foreign exchange market intervention for centr...
Emerging Markets: Finance eJournal, 2019
This paper reviews the Peruvian experience in using FX intervention and reserve requirements for ... more This paper reviews the Peruvian experience in using FX intervention and reserve requirements for macroprudential purposes, with the aim of limiting the financial risks associated with dollarisation. Peru is a successful market-driven case of dedollarisation, which reflects both macroeconomic stability and prudential policies. Since the adoption of inflation targeting in 2002, core inflation has been on average 2.1%. During the same period, financial dollarisation has declined steadily, from levels close to 80% to less than 30%. Besides delivering low and stable inflation, the current monetary policy framework has also contributed to providing an effective response to the global financial crisis, by limiting its spillover effects on the domestic financial system. Full Publication: Reserve Management and FX Intervention
Persistent high inflation in Peru during the 1970s led households to hold foreign currency as sto... more Persistent high inflation in Peru during the 1970s led households to hold foreign currency as store of value. This process of dollarisation increased significantly during the hyperinflation of 1988-90. In the years that followed, a wide-ranging package of reforms in the financial system and in the conduct of monetary policy and fiscal policy were introduced to bring a halt to the hyperinflation. But despite nearly a decade of subsequent economic stabilisation, the decrease in dollarisation has been slow: by June 1999 two thirds of domestic banking deposits were still denominated in dollars, only ten percentage points below their level in 1991. How has dollarisation affected the efficacy of monetary policy in Peru? In theory, under dollarisation, revisions in expectations of devaluation can lead to instability of the domestic money demand, making monetary control more difficult. But instability in the demand for base money would seem to arise more from a dollarisation characterised b...
Trade liberalisation, at first unilaterally and later through free trade agreements, has been fun... more Trade liberalisation, at first unilaterally and later through free trade agreements, has been fundamental to the structural reform of the Peruvian economy. The negotiated nature of free trade agreements reduced conflicts with local producers in exchange for access to higher-technology imports. The opening of external markets at lower tariff levels has boosted exports in sectors such as agriculture and mining. Therefore, the experience of trade opening is reviewed from the perspective of these two sector.
We evaluate the financial and real linkages between fiscal and monetary policy in Peru, and show ... more We evaluate the financial and real linkages between fiscal and monetary policy in Peru, and show that during the recent export commodity price boom, public finances supported the implementation of monetary policy. In particular, the reduction of the net public debt has translated into a greater capability by the Central Bank to sterilize its FOREX interventions. Also, an active policy to enhance the development of the local capital markets, using the issuance of public bonds denominated in local currency as a benchmark, has created the incentive to de-dollarize banking credit. On the other hand, difficulty in fine-tuning public investment around the business cycle in recent years has led to periods of a fiscal stance that does not counteract the real business cycle. This raises the question of the possibility of adopting a structural rule for the public sector balance, based on structural fundamentals. Full publication: Fiscal Policy, Public Debt and Monetary Policy in Emerging Mark...
Social Science Research Network, Dec 1, 2017
This article reviews macroprudential measures implemented in Peru to counter the boom-bust patter... more This article reviews macroprudential measures implemented in Peru to counter the boom-bust pattern of the credit cycle and mitigate the risks associated with dollarisation, the main vulnerability of the Peruvian financial system.
Analizan el rol de la tasa de referencia del BCRP para preservar la estabilidad de precios y el u... more Analizan el rol de la tasa de referencia del BCRP para preservar la estabilidad de precios y el uso del encaje a fin de reducir los riesgos asociados a la dolarizacion financiera.
Despite the average inflation levels of 2.8 percent between 2002 and 2015, within the range of th... more Despite the average inflation levels of 2.8 percent between 2002 and 2015, within the range of the price stability goal, partial dollarization remains as the main vulnerability of the Peruvian economy. Although financial dollarization has already been importantly reduced, in the case of lending, from 82 percent at the end of 1990’s to 29 percent in June 2016; the dollarization of transactions persists at high levels such as 58 percent imposing important challenges to monetary policy, principally in events of higher volatility of the exchange rate which passes-through to domestic inflation. In this scenario, measuring the real dollarization at the sectorial level and at the level of the structure of costs of non-financial firms becomes crucial to understand it and to contribute to the design of the monetary policy in the presence of dollarization. ∗The authors would like to thank to the participants of the XXXIV Central Reserve Bank of Peru Annual Research Conference for their useful...
Aunque la dolarizacion financiera se ha reducido considerablemente (en el caso de los creditos, d... more Aunque la dolarizacion financiera se ha reducido considerablemente (en el caso de los creditos, de mas de 80 en 1990 a menos de 30 en 2017), la dolarizacion de las transacciones persiste en niveles altos (alrededor de 60 por ciento). Ello impone desafios importantes a la politica monetaria, principalmente en escenarios de mayor volatilidad del tipo de cambio, que afectan a la inflacion domestica a traves del traspaso hacia precios. Este documento presenta una medicion de la dolarizacion real a nivel sectorial y al nivel de la estructura de costos de las empresas no financieras, lo que resulta crucial para comprender mejor este fenomeno y contribuir al diseno de la politica monetaria en el Peru.
During the early 1990s, many emerging market economies in Asia and Latin America experienced mass... more During the early 1990s, many emerging market economies in Asia and Latin America experienced massive capital inflows, favoured by structural reforms and improvements in macroeconomic management. Although the higher degree of financial integration brought many benefits, the capital inflows resulted in overheating and increased vulnerability to financial crises, which led in some cases to sudden reversals of capital flows.
Este articulo analiza uno de los elementos fundamentales de las reformas de las autoridades monet... more Este articulo analiza uno de los elementos fundamentales de las reformas de las autoridades monetarias, la independencia del banco central, concepto trascendental en el objetivo de mantener la estabilidad de precios.
Macroeconomics: Monetary & Fiscal Policies eJournal, 2017
This article reviews macroprudential measures implemented in Peru to counter the boom-bust patter... more This article reviews macroprudential measures implemented in Peru to counter the boom-bust pattern of the credit cycle and mitigate the risks associated with dollarisation, the main vulnerability of the Peruvian financial system.
Banking & Insurance eJournal, 2015
Bank lending remains the most important funding source for Peru’s non-bank private sector. Howeve... more Bank lending remains the most important funding source for Peru’s non-bank private sector. However, the corporate bond market is slowly emerging as an additional source of funds for domestic firms. As in other emerging market economies, Peruvian domestic non-financial corporations have been issuing bonds in the international capital markets,4 partly replacing domestic market bond issuances. Offshore issuance is cheaper, owing to quantitative easing in the developed world, and can also be attractive in terms of market efficiency, liquidity and economies of scale, in contrast to the less liquid local market. Although certain non-bank financial entities such as domestic pension funds are in a position to encourage the development of the domestic capital market, these entities are mainly oriented to the international markets.Full publication: What Do New Forms of Finance Mean for EM Central Banks?
El traspaso del tipo de cambio hacia precios domesticos en escenarios de dolarizacion impone mayo... more El traspaso del tipo de cambio hacia precios domesticos en escenarios de dolarizacion impone mayores retos a la politica monetaria. Mas aun, estos retos aumentan cuando las transacciones reales estan dolarizadas y contaminan la formacion de expectativas de inflacion al introducir asimetrias y no linealidades en la relacion entre el tipo de cambio y la inflacion durante periodos de alta depreciacion cambiaria en contraste a episodios de depreciacion moderada y periodos de apreciacion.
ERN: Monetary Policy Objectives; Policy Designs; Policy Coordination (Topic), 2016
Dollarisation intensifies the challenges posed to monetary policy by the pass-through of the exch... more Dollarisation intensifies the challenges posed to monetary policy by the pass-through of the exchange rate to domestic prices. These challenges become even greater when real transactions are dollarised, contaminating the formation of inflation expectations. This introduces non-linearities and asymmetries into the implications of the exchange rate for inflation during larger currency depreciations, in contrast to the case of smaller depreciations and appreciations. Full publication: Inflation Mechanisms, Expectations and Monetary Policy
Implementing monetary policy requires a good understanding and modelling of the monetary transmis... more Implementing monetary policy requires a good understanding and modelling of the monetary transmission mechanism. In the particular case of developing economies like Peru, this transmission mechanism would need to consider the degree of financial market development, price rigidities, the partial dollarisation of the economy, some possible non-linearity and the operating procedures of the central bank. It is also vital to be able to identify if shocks are transitory or permanent, nominal or real. These characteristics, together with the central banks aversion/tendency to frequent policy changes and the structure of its loss function, will exert some influence on the monetary policymakers reaction function.
La expansion monetaria sin precedentes implementada por los bancos centrales de paises desarrolla... more La expansion monetaria sin precedentes implementada por los bancos centrales de paises desarrollados en anos recientes genero un nivel extraordinario de flujos de capitales hacia los paises emergentes, y mantuvo altos los precios de commodities. En este documento, se describe que la respuesta de politica implementada por el Peru para enfrentar estos flujos se baso en las intervenciones cambiarias esterilizadas en el mercado cambiario y el uso de requerimientos de encaje sobre los pasivos externos de los bancos locales. Ambos instrumentos contribuyeron de manera significativa a reducir excesos de volatilidad del tipo de cambio, incrementar las reservas internacionales y asegurar el flujo normal del credito.
Comparative Political Economy: Monetary Policy eJournal, 2011
Economic and financial integration has reshaped the monetary policy frameworks and transmission c... more Economic and financial integration has reshaped the monetary policy frameworks and transmission channels in the emerging market economies (EMEs) over the past two decades. Economic and financial linkages have become stronger, resulting in greater synchronization of business cycles across advanced and emerging market economies. This has led to the faster transmission of shocks, especially through financial channels. Against this background, the 16th annual meeting of Deputy Governors from the major emerging market economies, held at the BIS in Basel in February 2011, addressed the question of how external factors had affected monetary policy in EMEs over the past few years. The present volume brings together papers prepared for that meeting. The discussion was organized around four broad topics: international banks, new liquidity rules and monetary policy in EMEs; exchange rates and monetary policy frameworks in EMEs; the implications of foreign exchange market intervention for centr...
Emerging Markets: Finance eJournal, 2019
This paper reviews the Peruvian experience in using FX intervention and reserve requirements for ... more This paper reviews the Peruvian experience in using FX intervention and reserve requirements for macroprudential purposes, with the aim of limiting the financial risks associated with dollarisation. Peru is a successful market-driven case of dedollarisation, which reflects both macroeconomic stability and prudential policies. Since the adoption of inflation targeting in 2002, core inflation has been on average 2.1%. During the same period, financial dollarisation has declined steadily, from levels close to 80% to less than 30%. Besides delivering low and stable inflation, the current monetary policy framework has also contributed to providing an effective response to the global financial crisis, by limiting its spillover effects on the domestic financial system. Full Publication: Reserve Management and FX Intervention
Persistent high inflation in Peru during the 1970s led households to hold foreign currency as sto... more Persistent high inflation in Peru during the 1970s led households to hold foreign currency as store of value. This process of dollarisation increased significantly during the hyperinflation of 1988-90. In the years that followed, a wide-ranging package of reforms in the financial system and in the conduct of monetary policy and fiscal policy were introduced to bring a halt to the hyperinflation. But despite nearly a decade of subsequent economic stabilisation, the decrease in dollarisation has been slow: by June 1999 two thirds of domestic banking deposits were still denominated in dollars, only ten percentage points below their level in 1991. How has dollarisation affected the efficacy of monetary policy in Peru? In theory, under dollarisation, revisions in expectations of devaluation can lead to instability of the domestic money demand, making monetary control more difficult. But instability in the demand for base money would seem to arise more from a dollarisation characterised b...
Trade liberalisation, at first unilaterally and later through free trade agreements, has been fun... more Trade liberalisation, at first unilaterally and later through free trade agreements, has been fundamental to the structural reform of the Peruvian economy. The negotiated nature of free trade agreements reduced conflicts with local producers in exchange for access to higher-technology imports. The opening of external markets at lower tariff levels has boosted exports in sectors such as agriculture and mining. Therefore, the experience of trade opening is reviewed from the perspective of these two sector.
We evaluate the financial and real linkages between fiscal and monetary policy in Peru, and show ... more We evaluate the financial and real linkages between fiscal and monetary policy in Peru, and show that during the recent export commodity price boom, public finances supported the implementation of monetary policy. In particular, the reduction of the net public debt has translated into a greater capability by the Central Bank to sterilize its FOREX interventions. Also, an active policy to enhance the development of the local capital markets, using the issuance of public bonds denominated in local currency as a benchmark, has created the incentive to de-dollarize banking credit. On the other hand, difficulty in fine-tuning public investment around the business cycle in recent years has led to periods of a fiscal stance that does not counteract the real business cycle. This raises the question of the possibility of adopting a structural rule for the public sector balance, based on structural fundamentals. Full publication: Fiscal Policy, Public Debt and Monetary Policy in Emerging Mark...